Answer the following questions true (T) or false (F)
1. In an oligopoly, minimum efficient scale is likely to occur at a level of output that is a large fraction of industry sales.
2. An equilibrium in which each player chooses its best strategy given the strategies chosen by the other players is called a Nash equilibrium.
3. The equilibrium in the prisoner's dilemma is a Nash equilibrium.
1. TRUE
2. TRUE
3. TRUE
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Government spending conducted for the purpose of achieving full employment, price stability, or economic growth is an example of
A) fiscal policy. B) monetary policy. C) interest-rate policy. D) exchange-rate policy.
When young students are hungry, they can be disruptive and inattentive in class. Thus, providing lunch to students has external benefits. The figure above represents the market for school lunches before and after government vouchers are issued
a. What is the unregulated private market equilibrium? b. What is the efficient quantity of lunches? c. What is the amount of the voucher necessary to move the economy to the efficient number of lunches? d. When vouchers are used, what is the dollar price of the lunch that suppliers receive and what is the dollar price that consumers pay when the voucher is used?